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All Aboard… for Cronyism!

People often criticize capitalism as giving too much power to big business, and use this concern as a justification for more government intervention in the economy. But the kinds of business practices that are most damaging come not from free market competition, but from government-sponsored cronyism, where certain businesses are given legal advantage over others for political purposes.

This is the situation in Florida, where a scheme known as All Aboard Florida would establish a high speed rail system with taxpayer dollars. Defenders of the program argue that, since a private company will be managing the operation, there is no need to be concerned about big government inefficiency and ineptitude, but nothing could be further from the truth. So far, governor has already committed more than $200 million in taxpayer money to fund the infrastructure, with a number of other spending necessity still waiting to receive spending scores.

This amounts to a state-granted monopoly on a transportation system that is not being demanded by the market. As we have seen with Amtrak, as well as countless public transit systems in cities all around the country, a lack of demand and poor planning inevitably result in systems that barely function, while remaining a continuous drain on taxpayers who never asked for these trains to be built in the first place.

It is doubtful that the spending commitments will end with the funds already promised. Already, there is talk of the government issuing sizable loans to the project, and a recent report found that current projects are woefully inadequate from the point of view of public safety. In order to bring the project up to code, we can be certain that Floridians will be obligated to supply additional funds out of pocket, not to mention covering the costs of any budget shortfalls once the trains are up and running.

With a publicly funded infrastructure project of this size, there is no way that the state will allow the business to fail if demand is lacking, which it almost certainly will be. This means further subsidization, and a lack of accountability that blurs the line between public and private management.

Proponents of these type of projects always claim that they will result in job growth and economic stimulation for the community. This is false. When taxpayer money is used to finance a specific project, those funds are diverted away from other potential uses. Early economist Frederic Bastiat famously pointed this out in his illuminating essay “That Which is Seen, and That Which Is Not Seen.” The money spent to build high speed rail (which, it will be remembered, is not wanted by the people paying for it) is not able to be spent elsewhere, such as to fill genuine market needs. When the government picks winners and losers, there is always an efficiency loss, since a central authority cannot anticipate the needs of consumers more than the discovery process of the market. The jobs thus “created” are not only an illusion, but actually represent a loss from the number of jobs that would have been created had the government not intervened. Yet 150 years after Bastiat, we are still having to debunk the same fallacy.

These sorts of public works projects only serve the purpose of politicians rewarding their friends at the expense of everyone else. High speed rail is a particularly attractive project for cronyists to support, because progressives like the way it sounds. Democratic Senators Kay Hagan and Mary Landrieu have supported projects similar to All Aboard Florida in their states.

A group of grassroots activists has organized a petition to oppose the corporate cronyism of All Aboard Florida, and have already collected more than 5,000 signatures. Additionally, FreedomWorks is issuing an Action Alert for our activists to hold politicians accountable for using taxpayer money to support a private company.

Interesting the gist of this article and its criticism given its written on a tea party site, hence supported by a fake party funded by billionaires using the political system to fool people to believe the movement is real, use it to tell one story, then manipulate the political system behind the scenes. Yeah... let's talk about "Cronyism"...

04/15/2014

Interesting that you completely FAIL to address the actual topic of this article. If you actually do object to cronyism, then why are you engaging in unfounded straw-man attacks against the organization publishing articles against it? Do you have even a shred of evidence to support your claims? Who are these shadowy billionaire bogeymen and what benefit are they gaining by agitating for smaller government and less cronyism? Meanwhile there are plenty of rich Democrat donors who have benefited from government funding granted as a reward for their political support. For example, 80% of all "green energy" loans and grants in the last 5 years went to Obama donors. So yeah, let's talk about cronyism.

BTW - Does it ever occur to you how ridiculous it sounds to claim that the Tea Party is funded by billionaires in order to manipulate the political system in one post, and then claim that the Tea Party is actually helping Democrats in another? That would make it a pretty lousy return on their investment, wouldn't it? Unless they are Democrat supporters, of course.

Last month, the United States International Trade Commission (ITC) voted unanimously against Boeing in a trade case it brought against its rival, Bombardier. Boeing had argued that Bombardier had illegally harmed their business by offering Delta Airlines a series of jets at a low rate. This claim was dubious, and was a clear attempt to try and eliminate their competition. The ITC’s decision is a victory for trade and anti-cronyism.

Competition is the hallmark of our economy. It promotes freedom of choice, innovation, and will lead to better products and prices for consumers. Not only that, but it is a key driver of job growth for Americans.

On behalf of our activist community, I urge you to contact your representative and urge him or her to cosponsor the Export-Import Bank Termination Act, H.R. 3114, sponsored by Rep. Justin Amash (R-Mich.). Several other House conservatives have cosponsored the bill, including Reps. Dave Brat (R-Va.), Michael Burgess (R-Texas), Thomas Massie (R-Ky.), and Tom McClintock (R-Calif.). The bill would abolish the Export-Import Bank, a relic of the New Deal and the face of cronyism.

The growth of America’s government may soon be outpaced by growth of the average waistline new indicators reveal. Rates of obesity have been increasing over the past several decades, but are now reaching some incredible levels. Currently it's estimated that well over one-third of adults are classified as obese and nearly two-thirds are classified as overweight. Perhaps more distressing is the recent discovery that one in six children are suffering from obesity.

The only thing growing faster than the government, it seems, is the waistline of the average American. Obesity rates have been on the rise over the past several decades, but are now reaching some incredible heights. Nearly two-thirds of the country are now considered overweight or obese and more than one in twenty are considered extremely obese.

FreedomWorks commented on Boeing’s official complaint against Bombardier for selling airplanes at a low price. FreedomWorks President Adam Brandon released this statement following the U.S. International Trade Commission's vote to move forward with a preliminary finding:

Boeing, the very same company, that received a whopping $7.4 billion in long-term loan guarantees from the Import-Export bank in 2014 recently submitted a formal U.S. trade complaint against Bombardier, a Canadian aircraft company on May 18 for its unfair trade practices. The pot calling the kettle black is an understatement when referring to Boeing’s complaint against Bombardier.

On Wednesday, the House Oversight and Government Affairs Committee held a hearing (more of a grilling) as Mylan’s CEO, Heather Bresch, the daughter of Sen. Joe Manchin (D-W.V.) took to the floor to give a defense of the EpiPen’s price hikes and to receive a verbal smackdown from an assortment of legislators.

Florida Gov. Rick Scott signed legislation that requires law enforcement to make an arrest before seizing property believed to be connected to a crime and increases the evidentiary standard the government needs to permanently keep seized property. The bill also offers procedural reforms, such as a $1,000 filing fee and $1,500 that the government needs to pay before beginning forfeiture proceedings against seized property. The bond would be payable to the property owner if the government fails to produce evidence that the property is connected to illicit activity.